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 18 Apr 2009

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Pipeline problems cause oil production stoppage at Indonesia’s Cepu

Exxon Mobil Corp has temporarily halted output at the Cepu block, one of the country's biggest oil finds in a decade, because of pipeline problems, Reuters quoted an official at the country's energy watchdog as saying Friday.

The giant Cepu oil block in central Java, which is being jointly developed by ExxonMobil and Indonesian state oil firm Pertamina, began initial production last December with a volume of around 800 barrels per day (bpd).

"Cepu production has been temporary stopped in March because the pipeline facilities for crude delivery have not been permitted by the regional government in Tuban, East Java," Edi Purwanto, deputy head of the watchdog, BPMIGAS, told Reuters.

"Cepu cannot continue production without a channel for its crude to be delivered," he said, without specifying when the problem would be resolved.

Purwanto said Cepu had capacity to produce around 20,000 bpd, but it was only producing around 100 bpd when it was stopped.

Exxon Mobil Indonesia official could not be reached for comment.

Cepu, which ranks among the US major's top 10 projects worldwide, is expected to produce 165,000 bpd when to reaches peak output in 2012.

Indonesia hopes the project will help arrest a sharp slide in Indonesia's crude production as ageing fields struggle to maintain output.

Indonesia's crude production dropped to 832,200 bpd in March, compared with 844,300 bpd in February and against around 1.5 million bpd in the 1990s.





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